Larry Ellison tells HP Shareholders how smart their board is

On CNN Money there was a piece the other day Oracle kicks HP while it’s down. But why?

Unkind people would say because its hard not to. In reality its because HP is rapidly going from Silicon Valley icon to the punch line of a joke.

Between new CEO, Meg Whitman, claiming she’s ideally suited to running HP because “I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley”, and paying out Leo for 11 months of spectacular decline.

Leo got $11 million. $7.2 million just to go away and $2.4 million for ‘results based bonus’. Results Based Bonus?!

Lets see, shut down the whole Palm thing, a share valuation that jumped off a cliff and putting it out there that HP will get out of the server/PC business and he gets a performance based bonus? I suppose if the bonus is based on decimating the company, then I guess its justified.

The best bit is they’re paying him to go back to France or Belgium and if he loses money on selling his house in California HP will kick in up to $300,000 to help poor Leo.

The reason Larry wants to kick HP while they’re down is because they deserve it!

Hell! I want to kick HP. This just makes me angry. Its stupidity of such a colossal scope. A Board that obviously did nothing to keep the CEO under control and now wants to keep its job by hiring Goldman Sachs to deal with ‘activist’ shareholders.

The best thing that could happen to HP right now would be for Oracle to buy them out and let Larry treat the HP Board to a bit of Ellison love.

The reports of my death are greatly exaggerated…kinda

One of the corporate butt coverers at HP, Jon Zilber, posted on the HP Palm blog that the planet was wrong.

WebOS isn’t dead. Its very much alive and kicking, just in some strange undead form and no one has been smart enough to see it.

He says “Far from burying webOS, our goal is to ensure the platform's evolution as a robust operating system for an increasingly mobile and connected world.“

I’m kind of curious to see exactly how this is going to happen.

Let’s try to imagine the conversation.

HP: WebOS has a huge future. We’ll cut you an amazing licensing deal on it. You can develop phones and tablets using it and compete against Android and iOS.

Prospective Licensee: Didn’t you guys try that?

HP: Yes.

Prospective Licensee: And how did that work out for you?

HP: It was a great experience. That’s why we’re here talking to you. We want to share the opportunities with you specifically and the rest of the industry for anyone with the vision to see the possibilities.

Prospective Licensee: So if it was such a great experience why did you stop making phones and tablets? I mean with a sell-through rate of around 10% on the tablet I’m not seeing an advantage here.

HP: It’s based on strategic initiatives.

Prospective Licensee (very confused): Huh?

HP: Leo has seen the future and its software.

Prospective Licensee (even more confused): Okay? But didn’t he say not that long ago that hardware was important?

HP (ignoring comment): So for us to leverage his strategic decision to strategically reposition HP as a software vendor by making this key acquisition for $10 billion of a cloud offering vendor that has astounding upside potential we need to exit future non-core businesses now before they become a drag on future potential earnings.

Prospective Licensee: What?

HP: Look. Everyone knows software is going to drive the industry so we’ve gotten out of the business of building tablets and phones.

Prospective Licensee: And you want me to develop software for what, exactly using WebOS?

HP: Phones and Tablets.

Prospective Licensee: I don’t understand.

HP: That’s part of our strategy. If people can’t understand exactly what we’re doing with WebOS you’ll be able to deliver a market shattering product.

Prospective Licensee: But I want to know what I’m getting into before I sign on the bottom line.

HP: Why? We didn’t when we bought Palm, we were just reacting to Apple and Google. Look everyone wants smartphones. Just sign here and you’ll make a fortune.

Prospective Licensee: I don’t think so.

HP: Trust us. We’ve got your back.

So WebOS is left to forever wander the Earth until someone finally decides that a wooden stake needs to be driven into its undead heart. I just don’t think anyone involved with HP’s Palm division will do it because it’ll be too detrimental to their career.

Better to spin a colossal screw up into a positive while polishing your CV while HP shareholders grab their ankles again.

Now that we ditched WebOS we can spend like there's no tomorrow

On the back of HP saying that they’re shutting down their WebOS business, Leo Apotheker decides that he’s going to go back to what he knows…monolithic, galactically expensive, software.

Yep there’s great fit for HP.

They’re in the hole for $1.2 billion over the Palm aquisition and now they want to shell out $10.24 billion to buy Autonomy. A 64% premium.

What is it with these guys? This is supposed to be a cash deal, no stock. Hmmm…they saw young Leo coming.

They get to cash up, big time, and Leo gets to add big software to the HP portfolio. Yet another acquisition to add business to the HP group, we can see how successful thats been in the past.

Looking forward to see how that one is going to turn out for the HP shareholders.

But you can bet that Leo will have cashed out by then and enjoying his life on some sandy beach leaving the HP shareholders to hold the bag.

I like the take that this article has on HP’s PC business. Tells me a lot about how Leo thinks.

He’s a software guy and he’s reverting to type. hardware just isn’t his thing.

I wonder if he would have made this deal if a large part of his bonuses was based on long term performance of the company after this latest cash splurge.

I really think that this isn’t going to end up being the greatest moment in HP’s history.